“The IOC petrochemical project was at an advanced stage and QPIC delayed its response at various stages, which would have in turn delayed our project completion, so we decided to go solo,” an official from IOC said.

“IOC saw a possible conflict of interest between the two companies after QPIC said it had intentions to form a consortium with another major player - Malaysia's Titan Petrochemicals ?xml:namespace>- to participate in the Panipat venture,” another official said.

The nucleus of the Panipat complex would be a paraxylene (PX) and purified terephthalic acid (PTA) plant, a naphtha cracker and polymer units which are expected to spur development of the plastic processing and allied industries in northern India, he added.

It would also include 1.25m tonnes/year of polyethylene and 325,000 tonnes/year of monoethylene glycol (MEG) capacity, he added.

The petrochemical unit would also produce benzene, pygas and carbon black feedstock as by-products, he added.

IOC has inked a memorandum of understanding with the state government for an incentive package to develop a hub of polymer processing units, he added.

“The per capita consumption of plastics in India at 4kg is far lower than the world average of 24kg and the last two decades have seen an average growth of 13.15% in the Indian petrochemicals industry,” he said.

IOC is also implementing a masterplan envisaging $6.8bn (€5.42bn) investment in petrochemicals by the year 2011-12, he added.